And yet, when you look closer at the analogies to Japan and the Depression, as well as the other deflationary episodes throughout history, all of a sudden the risks don't seem so great after all. Depression-style deflationary spirals should indeed be avoided. But the mere fact that average prices are falling does not a deflationary spiral make. In fact, throughout much of history, falling prices have happily co-existed with economic growth.

The problem that Scheiber sees is that the Fed's deflation-battling policies could bring us a return of stagflation.

On the other hand, the mirror image of deflation--a period of persistent inflation, which the Fed would be forced to combat with higher interest rates--can be very damaging to the economy itself. Rising interest rates inevitably slow down everything from housing and auto sales--major drivers of short-term economic growth--to investment by business, which determines the rate at which the economy can grow in the long term. The result could be that the rising unemployment and weak economic growth of the last few years remain with us for a frighteningly long time to come. By demonizing the risks of deflation while downplaying those of inflation, our policymakers may be setting us up for just the economic stagnation they so desperately hope to avoid.

If you're too young to remember, stagflation is a recession with high inflation -- a combination the Keynesian economists assured us couldn't exist.

The problem I see with Scheiber's article is twofold. We know, from hard experience, how to combat stagflation. Under Reagan's first two years in office, then-Fed Chief Paul Volker jacked up interest rates and shrank the money supply. Once inflation's power was sapped in the resulting crash, credit and the rates were both eased, leading to the big boom we experienced from 1983-2000, with only one brief interruption in 1991.

We also know, from even harder experience, that we have no goddamn clue how to get out of a deflationary spiral. Only the forced rigors of World War II got us out of the Great Depression, and Japan has been battling unsuccessfully for a decade to get out of its deflation trap.

Scheiber has me convinced that a little deflation can be a good thing. Remember that this country industrialized itself after the Civil War during a very long period of gradually declining prices.

But I still have to wonder if a deflationary tailspin still isn't more dangerous than another bout of Carter-era malaise. Carter, after all, brought us Reagan, our first decent president in 20 years. FDR gave us the ever-expanding nanny state.

We've recovered from Carter, but the worst bits of the FDR legacy still live on.